M&A

Energy Services | Energy Transfer Partners | Industrywide Issues | M&A | Sunoco Logistics

Sunoco Logistics Partners Ceases to Exist as of Today
April 28, 2017April 28, 2017

As of today, the nameplate on the door that says “Sunoco Logistics Partners” is getting changed to “Energy Transfer Partners” (ETP). On paper (and for investors) Sunoco LP & ETP have been different companies, but functionally both companies have co-existed under the Energy Transfer Equity (ETE) umbrella for years–essentially as different divisions of the same company. Sunoco LP is (currently) best known for its Mariner East pipeline projects–along with the Marcus Hook refinery/terminal. ETP is (currently) best known for the recently completed Dakota Access Pipeline. Sunoco LP’s headquarters will move from Newtown Square, PA to combine with ETP’s HQ in Dallas, TX. For investors, Sunoco LP will stop trading at close of business today and become part of the ETP ticker symbol as of Monday. Shareholders for both companies approved the paper merger on Wednesday…
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Energy Companies | EQT Corp | Industrywide Issues | M&A | Trans Energy

Keeping Trans Energy’s Bacon Out of Fire Earned Law Firm an Award
April 24, 2017April 24, 2017

Last October EQT announced a deal to buy Trans Energy, Inc., a public pure-play driller in the Marcellus in West Virginia, which will become a wholly-owned subsidiary of EQT (see EQT Buys Trans Energy + 60K Marc/Utica Acres in 2 Deals for $683M). EQT also bought Trans Energy joint venture partner Republic Energy’s share in their Marcellus jv. The land is located in Marion, Wetzel and Marshall counties (in WV). When the deal closed, investment bank Gordian Group strutted around making some big boasts about their role in the deal. Gordian, via a press release, took credit for keeping Trans Energy out of bankruptcy court and for soaking EQT on the purchase price (see EQT Closes on Trans Energy Deal; Investment Bank Makes Big Boasts). It seems Gordian isn’t the only one strutting about the the EQT/Trans Energy deal. International corporate law firm Haynes and Boone, with a big energy practice in Texas, also assisted with the deal. In fact, in a Haynes and Boone press release, they boast that keeping Trans Energy solvent long enough to sell out to EQT earned the law firm the 2016 “Out-of-Court Restructuring Deal of the Year” award by The M&A Advisor…
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Industrywide Issues | M&A

PwC Report: Oil & Gas M&A in 1Q17 Saw “Stunning” 160% Increase
April 24, 2017April 24, 2017

According to one of the top accounting/consulting firms in the world, PricewaterhouseCoopers (PwC), mergers & acquisitions (M&A) activity in the oil and gas sector in the U.S. set a new record high in 1Q17 for the first quarter of any year–$73.04 billion in deals. The report, titled “US Oil & Gas Deals insights first quarter 2017” (full copy below), says the market is quite pleased with The Donald’s pro-energy policies and is loosening up the money to fund new exploration and production. In fact, first quarter spending represents a “stunning 160% increase in deal value year over year.” Some 53 deals were announced in 1Q17, with upstream (i.e. exploration/drilling) taking the lion’s share with 32 deals worth $36.6 billion…
Read More “PwC Report: Oil & Gas M&A in 1Q17 Saw “Stunning” 160% Increase”
Energy Services | Industrywide Issues | M&A | Patterson-UTI | Seventy Seven Energy

Patterson-UTI Energy Completes Merger with Seventy Seven Energy
April 21, 2017April 21, 2017

As MDN told you last November, Patterson-UTI Energy, an oilfield services company with major operations in the northeast, is buying out and merging in Seventy Seven Energy (SSE) in an all-stock deal worth $1.76 billion (see Seventy Seven Energy Throws in the Towel, Sells to Paterson-UTI). SSE is the former Chesapeake Oilfield Operating company, the oilfield services subsidiary of Chesapeake Energy that Chessy spun out into its own company in July 2014 after it couldn’t find anyone to buy it (see Long Labor & Delivery: Seventy Seven Energy Born Yesterday). It was an ill-fated venture from the beginning. SSE never turned a profit after becoming its own company. In June 2016, SSE, which has major operations in the Marcellus/Utica, filed for bankruptcy, then emerged from bankruptcy two months later borrowing $100 million (see Seventy Seven Energy Pops Out of Chapter 11 Bankruptcy in 2 Mos.). With Patterson is buying it, they are on the hook for SSE’s debts. So even though the deal to buy SSE is a no-cash stock swap, Patterson still needs a boatload of cash to pay off SSE’s debts. So Patterson floating 15.8 million shares of stock at $26.45 per share to raise $418 million in order to pay off SSE’s debts (see Patterson-UTI Floats $418M of New Stock to Pay Off SSE’s Debts). The day has finally arrived. Yesterday Patterson closed on the deal and now SSE, nee Chesapeake Oilfield Operating, is no more…
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Energy Services | Ethane | Industrywide Issues | M&A | NOVA Chemicals | Processing Plants | Williams

Williams Sells Gulf Coast Cracker Plant to NOVA Chemicals
April 18, 2017April 18, 2017

Williams Geismar Olefins facility – click for larger version

Midstream giant Williams has been on a mission to make the company economically stronger AND produce cash that can be used for various purposes. In August, Williams announced they would sell their Canadian assets for $1 billion (see Bold Move – Williams Selling Canadian Assets). In September, Williams announced another potential asset sale–the company’s 88.5% ownership interest in the Geismar, Louisiana olefins petrochemical plant (see Williams Considers Selling its Gulf Coast Ethane Cracker Plant). The Geismar olefins plant is an ethane cracker by another name. It uses either ethane or propane and chemically “cracks” it into ethylene and propylene–raw plastics used by manufacturers. What does the Geismar plant have to do with the Marcellus/Utica? Directly, not much. There may be some Marcellus/Utica ethane flowing to that plant for processing, although we haven’t heard that. We’re interested in the story because Williams is one of the major midstream companies operating in our region. Anything that affects the company and its ability to continue operating, including asset sales in other regions, interests us. So it was with keen interest that we noticed Williams has now done the deal. They’ve agreed to sell the Geismar plant to Canada-based NOVA Chemicals, for $2.1 billion. Williams plans to use the money from the sale to pay down debt and fund capital investments…
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Bradford County | Energy Services | Industrywide Issues | M&A | Pennsylvania | Williams

Williams Closes Deal to Increase Ownership in NEPA Pipeline System
March 31, 2017March 31, 2017

Click for larger version

In 2014 Williams bought out Access Midstream, the renamed and former division of Chesapeake Energy called Chesapeake Midstream (see Big News: Williams Partners Buying Access Midstream for $6B). When Williams bought Access, one of the regional pipeline gathering systems it got as part of that deal is what Williams calls the Bradford Supply Hub (named after Bradford County, PA). In February, Williams announced a deal with a part-owner for portions of the Bradford Supply Hub, Western Gas, to buy out Western’s portion (see Williams Cuts Deal to Increase Ownership in NEPA Pipeline System). Through an elaborate deal, Williams gets Western’s 33.75% ownership stake in what is called the Rome and Liberty natural gas gathering systems (part of the Bradford Supply Hub), along with a check for $155 million. In return, Williams is transferring to Western its 50% ownership stake in the Delaware Basin JV Gathering pipeline system, located along the New Mexico/Texas border. That deal, first announced in February, is now done…
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Energy Services | Industrywide Issues | M&A | Mammoth Energy Services | Sand/Proppant

OFS Mammoth Energy Buys Second Sand Co. to Keep on Frackin’
March 30, 2017March 30, 2017

Oilfield services company (OFS) Mammoth Energy Services, headquartered in Oklahoma City, OK, operates in both the Utica Shale and Permian Basin. Last week MDN reported that Mammoth, a new company formed in 2014 (but growing rapidly), had bought itself a sand mine/processing plant (Taylor Frac) in an effort to keep Mammoth’s fracking crews stocked with frack sand (see OFS Mammoth Buys Sand Co. to Ensure Steady Supply for Fracking). A couple of days later Mammoth did it again–purchasing a second sand mine (Chieftain Sand and Proppant) with twice the capacity. And they picked it up on the cheap, in a bankruptcy auction for $35 million…
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Enbridge | Energy Services | Industrywide Issues | Jobs | M&A | Spectra Energy

Enbridge Axing 1,000 (Mostly) Spectra Energy Jobs
March 24, 2017March 24, 2017

Last September MDN reported on a midstream deal with major implications for the Marcellus/Utica: Canadian pipeline operator Enbridge Inc. announced an all-stock deal to buy out pipeline operator Spectra Energy, based in Houston, for $28 billion (see Canadian Enbridge Buying US Spectra Energy for $28B). Spectra has a number of critical pipeline infrastructure projects under way or planned in the Marcellus/Utica region, including the planned Access Northeast pipeline to New England, the mighty NEXUS pipeline planned to span Ohio, the currently under construction Algonquin Incremental Marketing (AIM) pipeline project, and three projects (Access South, Adair Southwest and Lebanon Express) under way to expand one of the largest natural gas pipelines in the U.S. (and in the northeast)–the Texas Eastern Transmission (Tetco) pipeline. The merger was completed in February (see Spectra Energy is No More – $28B Merger with Enbridge Complete). Unfortunately, this week Enbridge announced they are axing around 1,000 jobs (6% of the workforce), to “address the overlap” and optimize “synergies” in the newly-combined company. Most of the 1,000 jobs being axed are from the Spectra workforce in the Houston area. We wonder how many top managers were “overlap” and “synergy optimized?” Yeah, likely none…
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Energy Services | Energy Transfer Partners | Industrywide Issues | Litigation | M&A | Williams

Court Says was OK for ETE to Scuttle $33B Williams Takeover Deal
March 24, 2017March 24, 2017

Last year an elaborate midstream drama unfolded before our very eyes. Energy Transfer Equity (ETE) pushed and prodded and poked and cajoled and insisted, and finally with the help of an inside corporate raider, forced Williams to agree to a buyout/merger (see Williams Accepts ETE’s “Indecent Proposal” – Price Went Down $10B). Then the bottom dropped out of the price of natural gas and drillers scaled back drilling and consequently midstream (i.e. pipeline) companies like ETE and Williams got pinched. And ETE got cold feet (see ETE Wants Out of Williams Merger/Takeover, Offering $2B Breakup Fee). Williams said “not so fast, you wanted us, you’ll be taking us” and consequently sued ETE to force the merger to happen (see Merger Turns Sour: Williams Sues ETE/CEO Kelcy Warren). However, in the end, the merger never happened (see Dead as a Doornail: ETE Terminates Merger with Williams). Since breaking the agreement, Williams and ETE have been in court battling over lots of things, including a $1.5 billion breakup fee. Earlier this week an appeals court ruled ETE was within its rights to break the deal. What does that mean about paying Williams a breakup fee?…
Read More “Court Says was OK for ETE to Scuttle $33B Williams Takeover Deal”
Energy Services | Industrywide Issues | M&A | Mammoth Energy Services | Sand/Proppant

OFS Mammoth Buys Sand Co. to Ensure Steady Supply for Fracking
March 22, 2017March 22, 2017

Oilfield services company (OFS) Mammoth Energy Services, headquartered in Oklahoma City, OK, operates in both the Utica Shale and Permian Basin. Mammoth offers services like “completion and production services, natural sand proppant services, contract land and directional drilling services and remote accommodation services.” Mammoth is a baby company, formed in 2014, but growing rapidly. The company booked $243 million in revenue for the 12 months ended June 30, 2016 (see Mammoth Energy 3Q16: “Intense Fracs” in Utica Shale). OFS companies like Mammoth do a lot of fracking. Lately there has been talk and concern that there won’t be enough frack sand to meet all of the increasing demand (see Go Pound Sand, Please! Proppant Shortage on the Way?). Mammoth wants to reassure its customers that it will have plenty of sand for fracking–so it just went out and bought its own sand mine! Yesterday Mammoth announced it has cut a deal to buy Taylor Frac, which owns a 0.7 million ton per year sand mine and processing plant. In addition, Mammoth cut a deal to buy Stingray Energy Services and Stingray Cementing, which offer services in fresh water transfer, equipment rental, re-fueling and cementing, primarily in the Marcellus/Utica region. Here’s the lowdown on the baby Mammoth that’s growing up rapidly…
Read More “OFS Mammoth Buys Sand Co. to Ensure Steady Supply for Fracking”
Enbridge | Energy Services | Industrywide Issues | M&A | Spectra Energy

Spectra Energy is No More – $28B Merger with Enbridge Complete
February 28, 2017February 28, 2017

Last September MDN reported on a midstream deal with major implications for the Marcellus/Utica: Canadian pipeline operator Enbridge Inc. announced an all-stock deal to buy out pipeline operator Spectra Energy, based in Houston, for $28 billion (see Canadian Enbridge Buying US Spectra Energy for $28B). Spectra has a number of critical pipeline infrastructure projects under way or planned in the Marcellus/Utica region, including the planned Access Northeast pipeline to New England, the mighty NEXUS pipeline planned to span Ohio, the currently under construction Algonquin Incremental Marketing (AIM) pipeline project, and three projects (Access South, Adair Southwest and Lebanon Express) under way to expand one of the largest natural gas pipelines in the U.S. (and in the northeast)–the Texas Eastern Transmission (Tetco) pipeline. The update is that as of yesterday, Spectra Energy is no more. The merger is complete, and Spectra’s stock has stopped trading, and the name on the door has changed. Yes, this is a big, hairy deal for our region…
Read More “Spectra Energy is No More – $28B Merger with Enbridge Complete”
CNG/LNG | Industrywide Issues | M&A

LNG Co Tellurian Merges With, Takes Over Magellan Petroleum
February 14, 2017February 15, 2017

As we pointed out to you last December, evil corporate raider Carl Icahn (invests in companies so he can fire a bunch of people, boost the stock and pocket the profit) had fired Cheniere Energy CEO Charif Souki (see Evil Corporate Raider Carl Icahn Claims Another CEO Scalp). Souki hasn’t let it slow him down. He started a new LNG export company, Tellurian, to compete with his old company (see Revenge: Fired Cheniere CEO Starts Competing LNG Company). We kind of had (past tense) a soft spot for Souki, getting tossed from the company he started. But then we read comments he made about Donald Trump, saying if Trump won, he would reconsider his American citizenship (see Will Charif Souki Renounce His American Citizenship?). We’re still waiting for Souki to move back to Egypt. Since forming Tellurian, he’s moved fast to finance the company and its coming Driftwood LNG export facility, essentially by selling off large chunks of it, $25 million from GE Oil & Gas (see GE Oil & Gas Invests $25 Million in LNG Co Tellurian), and $207 million from Total (see French Supermajor Total Buys 23% Stake in Tellurian LNG). Until now, Tellurian has been a private company, no publicly traded shares of stock. That changed last Friday when Tellurian merged with/took over Magellan Petroleum Corporation and began trading stock in the newly merged company on the NASDAQ stock exchange…
Read More “LNG Co Tellurian Merges With, Takes Over Magellan Petroleum”
Energy Services | Industrywide Issues | Landfills | M&A | MAX Environmental | Pennsylvania | Washington County

Pittsburgh-based MAX Environmental Purchased by Investment Firm
February 8, 2017February 8, 2017

In 2014 MDN reported that MAX Environmental, operator of the Bulger hazardous waste landfill in Smith Township (Washington County), PA since 1958, planned to expand the landfill by 21 acres in order to handle an increase of drill cuttings and even liquid waste (which they will turn to solid waste) coming from Marcellus Shale drilling (see New Landfill Expansion in SWPA Aimed at Marcellus Drillers). That did happen and the landfill accepts Marcellus/Utica waste. The new news is that MAX has sold itself to Altus Capital Partners–a private equity investment firm–for an undisclosed amount. As soon as the deal closes, MAX will get a new CEO and MAX’s current CEO/owner, William Spencer, will ride off into the sunset…
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Energy Services | Industrywide Issues | M&A | WGL Holdings

Wash DC Utility Selling Itself to Canadians, Marcellus Connection
January 26, 2017January 26, 2017

In November rumors swirled that WGL Holdings, the umbrella company that owns Washington (DC) Gas Light Company and WGL Midstream, is considering selling itself to utility giant (and Spanish-based) Iberdrola (see DC NatGas Utility WGL Considers Selling Itself to Spanish Company). Although Iberdrola was sniffing around, apparently they didn’t offer enough money. WGL announced yesterday that instead of selling itself to Ibedrola, it is selling itself to Canadian-based AltaGas Ltd.–for US$6.4 billion. OK, so what does that have to do with the Marcellus/Utica? Plenty. For one, WGL’s midstream (pipeline) subsidiary will be one of the important ways nearly half a billion cubic feet of Marcellus gas will get to the Cove Point LNG facility in Maryland when that facility goes online later this year (see WGL & Antero to Provide Marcellus Gas to India via Cove Point). Second, WGL is the owner of 10% of the Mountain Valley Pipeline project, a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA (see WGL Midstream Buys More of Mountain Valley Pipeline). And third, WGL (the utility) is buying and using Marcellus gas for its customers in the Washington, DC area. At one point the utility tried to buy 25 of its own Marcellus wells, a plan rejected by Virginia regulators (see Virginia Rejects Deal for DC-based Utility to Buy Marcellus Wells). So yeah, this is a big deal with implications for the Marcellus…
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Energy Services | Industrywide Issues | M&A | Patterson-UTI | Seventy Seven Energy

Patterson-UTI Floats $418M of New Stock to Pay Off SSE’s Debts
January 25, 2017January 25, 2017

As MDN told you in November, Patterson-UTI Energy, an oilfield services company with major operations in the northeast, is buying out and merging in Seventy Seven Energy (SSE) in an all-stock deal worth $1.76 billion (see Seventy Seven Energy Throws in the Towel, Sells to Paterson-UTI). SSE is the former Chesapeake Oilfield Operating company, the oilfield services subsidiary of Chesapeake Energy that Chessy spun out into its own company in July 2014 after it couldn’t find anyone to buy it (see Long Labor & Delivery: Seventy Seven Energy Born Yesterday). It was an ill-fated venture from the beginning. SSE never turned a profit after becoming its own company. In June of this year, SSE, which has major operations in the Marcellus/Utica, filed for bankruptcy, then emerged from bankruptcy two months later borrowing $100 million (see Seventy Seven Energy Pops Out of Chapter 11 Bankruptcy in 2 Mos.). In the third quarter of this year, the red ink continued to flow, with SSE losing $36.5 million. Now that Patterson is buying it, they are on the hook for SSE’s debts. So even though the deal to buy SSE is a no-cash stock swap, Patterson still needs a boatload of cash to pay off SSE’s debts. So Patterson is floating 15,800,000 shares of stock at $26.45 per share to raise $418 million. The stated reason? “To fund the repayment of the outstanding indebtedness of Seventy Seven Energy Inc.”…
Read More “Patterson-UTI Floats $418M of New Stock to Pay Off SSE’s Debts”
Industrywide Issues | M&A | Ohio | Statewide OH

OH NatGas Utility Sells Itself to Energy Investment Firm
January 20, 2017January 20, 2017

A Cleveland, OH-based natural gas utility company, Gas Natural Inc., has sold itself to investment firm First Reserve Energy. Gas Natural sells 21 billion cubic feet (Bcf) of natural gas to roughly 68,600 customers through regulated utilities operating in Montana, Ohio, Maine and North Carolina. Gas Natural’s other operations include an intrastate pipeline, natural gas production and natural gas marketing. First Reserve Energy is an investment firm focused solely on investing in (and buying) energy companies. Shareholders for Gas Natural voted at the end of December to approve the buyout/merger…
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